Commentary from Silicon Valley on business models and other aspects of the economics of energy efficiency and renewable energy.

Friday, December 12, 2008

At end to ethanol madness

Much has been made of that the Energy secretary-designate, Steven Chu, is a Nobel Laureate — a relatively rare qualification for a cabinet secretary. Apparently he would be the first one with an earned Nobel (as opposed to the Peace prize, which is an overtly political award).

Dr. Chu has been heavily involved in biofuels research to find alternative and more efficient feedstocks for ethanol and biodiesel production. At a 25x’25 Renewable Energy Summit earlier this year in Omaha, Chu said, “We should look at corn as a transitional crop,” but within five to 10 years he expects scientific discoveries and refining processes could improve enough to move grasses, woody substances and waste to the head of the line for making fuels.

At a talk this summer in Nevada, Chu said, "In the first eight months of a new research program, we have developed ways to separate out cellulose, and we have already made a yeast [that] makes a gasolinelike fuel. Already within eight months, we are working on diesel and jet replacement fuels. We need to work with making this really scalable so it will outperform the yeast we have to today." (One potential disagreement with Obama: Chu has criticized corn-based ethanol, which Obama has strongly supported in the Senate and in the campaign.)

The energy budget for corn-based ethanol is questionable, while the economics are not: it can’t survive without subsidies.

The case for celluosic ethanol (thus far) seems much more economically feasible, but it’s unclear whether President Obama (let alone Congress) will be able to stop buying votes with farm state subsidies.